Court handed over the Kurdistan Region's oil sales to Baghdad

Economy 01:51 PM - 2023-04-11

Iraqi and Kurdistan flags.

After more than ten years, the Kurdistan Democratic Party (KDP) was unable to establish an independent economy or manage the oil sector in the Kurdistan Region. As a result, Iraq was given control of the oil sales under pressure from international and local courts, which was motivated by the people's desire for a better life and financial transparency. 

Regarding the oil issue in the Kurdistan Region, Bafel Jalal Talabani, president of the Patriotic Union of Kurdistan (PUK), said: "It is time to make the right decision for the future of our country and to avoid serious issues and crises."

KDP caused great suffering to the Kurdistan Region

Sarko Azad Galali, a member of the Kurdistan Parliament's Natural Resources Committee, told PUKMEDIA: "Unfortunately, after more than ten years of KDP management of the oil sector, the Kurdistan Region has faced numerous economic crises, the level of economic development has dropped to its lowest level, projects have stopped, and salary delays and deductions have emerged." 

He continued: "We have seen how a group of gangs and thieves controls the oil of the Kurdistan Region, and the issue of the independent economy and the export of oil has become a dark mark in the history of the Kurdish government.

Handing over the oil sector to Iraq is much better

After ten years of economic and oil sales independence, the oil sales and revenues of the Kurdistan Region were handed over to Baghdad during the ninth cabinet of the Kurdistan Regional Government (KRG) and are sold through SOMO. 

Galali stated: "The people of Kurdistan are delighted with the handover of the oil sales to Baghdad because every citizen in Baghdad now knows how many litres of oil were exported, how much was sold, and what the government's revenue is." 

He added: "In those years, we witnessed party-affiliated companies and brokers seize 50 percent of oil sales... The oil of the Kurdistan Region became a blessing for one party and a curse for the citizens."

Not an agreement, but surrender

What the KRG did was not an agreement with Baghdad; rather, it handed over oil under pressure. 

"What the Prime Minister of the Kurdistan Region talked about is not an agreement with the federal government, but rather a handing over of the Region's oil under pressure," oil industry analyst Rebwar Muhammad told PUKMEDIA. 

"The export of the oil from the Kurdistan Region under the pretext of an independent economy caused immense harm to the Kurdistan Region, and as a result, the living standards of the people dramatically decreased, and no one knew the size of the oil sales and how it was spent," he continued.

Oil exporting via SOMO is substantially better

"There is no question that the oil sales will be transparent, and the government's revenues will be known to all of us if the oil is sold through SOMO," said Muhammad. 

"Now that the oil sector is no longer under the control of the KDP, all provinces will have an equal share in the budget of the Kurdistan Region; perhaps this will contribute to solving some difficulties," he continued. 

The Kurdistan Region has suffered economic harm during the past ten years as a result of the KDP-controlled government's efforts to establish an independent economy. The Region is now projected to owe $30 billion in debt. Therefore, under pressure from the International Court of Arbitration in Paris, Kurdish Prime Minister Masrour Barzani visited Baghdad on April 4, 2023, and implemented the ruling of the Paris Court on the suspension of independent oil exports from the Kurdistan Region.



PUKMEDIA